The battle for DFW craft brewers to keep shelf space

In a market with increasing competition, craft brewers in North Texas are trying to set themselves apart on local grocery store shelves.

Because of natural growth in the industry segment, craft beer makers are angling to get a bite of retail sales. Cans and bottles sold on store shelves account for 80 percent of all beer sales in the U.S., according to a study by Bart Watson with the Brewers Association and Marcel Zondag at Western Michigan University.

The battleground for limited shelf space continues to get more crowded. In 2011, there were 59 breweries in Texas, according to data from the Brewers Association. In 2017, there were more than four times as many craft breweries. Those numbers also don’t consider the beers produced by behemoths like Anheuser-Busch and MillerCoors.

“It’s very important to make sure chains are happy,” said Wim Bens, president and founder of Lakewood Brewing Company. “You kind of live and die by those placements. That’s the hard thing for craft — to get your foot on the shelf, if you know what I mean.”

For Lakewood, about half of the business comes from selling cans and bottles to retailers, Bens said. To maintain its presence in grocery stores, the Garland-based brewery makes sure it is constantly innovating its products and are top of mind for consumers by doing in-store tastings.

North Texas craft brewers like Franconia started out in kegs only, but once its following grew, it moved to packaged beers. Now about 40 percent of its business is cans and bottles, according to CEO Arvind Sharma and master brewer Dennis Wehrmann. For the pair from Franconia, keeping its spot on shelves is about making sure they’re staying relevant in the market.

Often the relationship between retailers and brewers is facilitated by distributors — beer’s middleman that delivers to stores and stocks the shelves. While some craft brewers do the distributing themselves, others work with a third-party company like Andrews Distributing.

Blythe Lee, craft brand director for Andrews, said that shoppers expect lots of choices on their grocery store shelves, benefitting both the brewers and the stores.

"Getting the right mix and assortment of brands on the shelf for the shopper is important. but keeping that space and right-sizing it to take advantage of both scale and growth brands is key,” Blythe said. “With a growing number of brand offerings that shoppers expect in shelf space that is not increasing, it adds some complexity on how to manage this fun and ever-changing category.”

The partnership is important because distributors help keep you on the shelf, said Kevin Carr, founder of Community Beer Company.

“(Distributors) are making sure that when inventory is depleted, there’s a backstop,” Carr said.

While selling out may seem like a positive, brewers who want to keep their shelf space should be weary. The retailer could see the rate of sale was negatively affected while the beer wasn’t fully stocked and may decide to not carry that beer anymore.

According to data from the Texas Alcoholic Beverage Commission, 32 local breweries sold beer this year in North Texas.